The Regal Cycle Company manufactures three types of bicycles-a dirt bike, a mountain bike, and a racing bike. Data on sales and expenses for the past quarter follow: Mountain Total Dirt Bikes Bikes facing nikes Sales 5.920,000 $ 265,000 $ 403,000 Variable manufacturing and selling expenses $ 252,000 471,000 113,000 206.000 152.000 Contribution margin 449,000 152.000 192,000 100.000 Fixed expenses Advertising, traceable 69,400 3,700 40,200 20,500 Depreciation of special equipment 43,900 20,400 7.900 15,600 salaries of product-line managers 115,200 40.600 38,00 36,200 Allocated common fixed expenses 184,000 53,000 80.600 50,400 Total fixed expenses 412.500 122,700 167.100 122,700 Met operating income (10) $36,500 $.29.300 $ 29,900 $ (22,700) "Allocated on the basis of sales dollars. Management is concerned about the continued losses shown by the racing bikes and wants a recommendation as to whether or not the line should be discontinued. The special equipment used to produce racing bikes has no resale value and does not wear out Required: 1. What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? 2. Should the production and sale of racing bikes be discontinued? 3. Prepare a properly formatted segmented Income statement that would be more useful to management in assessing the long run profitability of the various product lines. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? profitability of the various product lines. ment in assessing the long-run Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare a properly formatted segmented Income statement that would be more useful to management in assessing the long-run profitability of the various product lines. Totals Dirt Bikes Mountain Bikes Racing Bikes 0 0 0 Sales Variable manufacturing and selling expenses Contribution margin (loss) Traceable fixed expenses: Advertising, traceable Depreciation of special equipment Salaries of the product line managers Total traceable fixed expenses Product line segment margin (loss) Common fixed expenses Net operating income (ons) 4 0 0 0 0 o $ 0 $ 0 $ O $ 0